Cotton continues to be under pressure as the COT report shows a decreasing of index longs this week while specs and commercials were mostly unchanged. The USD bounced back today after more concern of weakness in Europe and tightening in China. Volume was average today as we head into another 3-day weekend. We managed to close above the support line at 72.00, but the technicals still look negative as equities and commodities all closed the week lower.

We have been seeing good scale down demand from mills, but specs still have room to sell and the USD is firm. There are rumors of possibly a 10% increase in global cotton acres for the 10/11 season which should keep a lid on the Z'10. The H'10 does have some short term support, but if China pulls back going into Chinese New Year, the market will struggle to build a bottom and we could try and test support at 70 and 68 cents.